- The Aussie dollar traded below 0.7620 recently against the US Dollar, and broke a major support.
- There is a descending channel pattern formed on the 4-hours chart of AUD/USD, acting as a resistance at 0.7600, and a downside move catalyst.
- Today, the Financial Stability Review was released by the Reserve Bank of Australia, which failed to help the Aussie dollar.
RBA Financial Stability Review
Today in Australia, the Financial Stability Review, which provides the Bank’s assessment of the current condition of the financial system and potential risks was released by the Reserve Bank of Australia.
The report did not provide any positive feedback on the current condition of the financial system, which failed to lift the market sentiment for the Aussie dollar. The opening statement of the report was “A number of risks continue to weigh on the outlook for the global financial system. In China, the level of debt is high and rising despite slower economic growth and signs of excess capacity in some areas; much of the new debt is being extended by the more opaque yet interconnected parts of its financial system”.
There was another important release, which impacted the Aussie dollar. The Chinese Consumer Price Index was published by the National Bureau of Statistics of China.
The outcome was positive, as there was a rise of 1.9% in the Chinese CPI in Sep 2016. There was a minor rise in the Aussie dollar after the report was released, but the upside found sellers near an important resistance of 0.7600.
AUD/USD Technical Analysis
The Aussie dollar recently moved below a couple of important supports like 0.7620 and 0.7600 against the US Dollar. The AUD/USD pair also moved below the 100 simple moving average (H4 chart).
It looks like the pair under a bearish pressure, and currently following a descending channel pattern formed on the 4-hours chart. The pair has also moved below the 50% Fib retracement level of the last wave from the 0.7441 low to 0.7710 high to form a downtrend.
Overall, the pair may slowly grind lower in the near term, as long as the 100 simple moving average (H4 chart) is intact. A break of the channel support area may call for a test of the last swing low of 0.7440.
Tags: AUD/USD Technical Analysis, Aussie dollar, RBA, US Dollar